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LONDON (ICIS) — News that the outage at Freeport LNG in the US will last longer than initially expected drove up the ICIS European TTF gas benchmark due to lower expected US exports. The ICIS East Asia Index (EAX) also climbed, underscoring its close ties to Europe’s prices. The US Henry Hub, in contrast, initially fell heavily on concerns over lower feedgas demand for Freeport. Also driving prices were Russian Gazprom’s reduced flows on the Nord Stream 1 Pipeline.
High prices were cited as the reason for some LNG tenders not being awarded. New buy tenders were issued from India, and Southeast Asia, while new sell tenders came out of the Middle East. Longer term, Norway’s Equinor agreed on 16 June to supply UK’s Centrica with an extra 1 billion cubic metres/ year of gas to cover the next three winters.
NS1 and Freeport Impact
The ICIS TTF price surged on 16 June, as Nord Stream 1 pipeline flows dropped again. The July ‘22 contract was trading at over $44/MMBtu in the morning, up by over 20% on the previous close. Russian supplier Gazprom said earlier in the week it would reduce flows on the key pipeline.
The impact on prices was also felt from US Freeport LNG. Partial operations at the plant could be expected in about 90 days, and repairs following the 8 June fire may take until late 2022. The plant has been a key supplier of LNG to Europe this year.
Freeport offtaker BP declared force majeure on a cargo scheduled for delivery to Europe from Freeport.
Japan’s JERA was said to be seeking replacement volumes due to the outage.
ICIS updated its LNG Supply Forecast, reducing the US supply by almost 1.3m tonnes in July and August, and cutting September by almost 0.25m tonnes.
Shipping charter rates fell on lower volumes out of Freeport.
Norway’s Equinor agreed to supply UK utility Centrica with Norwegian gas to cover the next three winters. Equinor said the agreement will add an extra 1bcm/year to the existing contract.
Tenders Issued, Awarded
Egypt’s EGAS is offering a cargo for loading end June from its Idku LNG plant. The cargo was previously offered through a tender, but not awarded.
Middle East producer ADNOC is offering a 29-31 July cargo on a delivered basis. The tender closes on 16 June.
India’s GAIL issued a swap tender on 15 June, seeking to sell two FOB cargoes from US Cove Point on 3 August and 27 September. In exchange, GAIL is seeking deliveries into its Dahej terminal, one for either 5 or 15 August and another for 21 or 27 September on a delivered basis. Offers are due 17 June.
Japan’s INPEX could have awarded a cargo for delivery to Naoetsu for 1-5 August for $26-27/MMBtu.
Singapore’s SLNG may have awarded a delivered cargo for 1 July- 31 August delivery at around $23-24/MMBtu.
Thailand energy firm PTT may have partially awarded some July cargoes at $24.00-25.00/MMBtu through a tender that closed on 13 June.
Thai utility EGAT did not award a delivered buy tender to the Map ta Phut terminal for delivery for early-to-mid July that closed on 13 June because prices were too high. Thai incumbent PTT bought one cargo for delivery window options throughout July in the high-$24.00s/MMBtu.
Turkey’s BOTAS was unlikely to have awarded its 39-cargo buy tender, deterred by high price levels.
New Supply Plans Progress
TotalEnergies signed for 25% of a joint venture with Qatar Energy, with the venture in turn holding 25% of Qatar’s North Field East LNG expansion.
European Regas Capacity
Germany’s Hanseatic Energy Hub invited market participants to submit binding bids for terminal capacities from 16 June to 29 July 2022.
Italy’s Offshore LNG Toscana said 34 slots of 155,000cbm were allocated for each gas year starting from 2023/2024 until 2026/2027.
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